1/. welcome to today's "worldwide exchange." i'm ross westgate.

>> and i'm kelly evans. >> european stocks leading the gains today in the world. analysts like the organic growth number. >> new car registrations across the eu slumped to an all-time low in january. government delays its decision on the next bank of japan governor. is this the beginning of a more moderate japanese agenda? and we're live in milan as the italian electoral race enters the final stref. we'll hear just why the mayor will decide to vote. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. welcome to today's, a bit of a transport theme going on this morning. >> or lack thereof. >> well, there's bmw, has their recalled. you have to take your one and three series back.

>> the thing about the bmw is people have to take them to the special bmw shop, anyway. when you have a recall like this, it's a pretty straightforward process for owners. >> then making a replica of the "titanic." some people are worried they're making it in a chinese shipyard. >> they're pitching this with "titanic" with a twist. some say the twist should be maybe this time it won't sink. >> they are going to do the original sailing route. what happens when they get three quarters of the way across? >> they may make it to the destination. >> then it won't be the full titanic experience. >> no, thank god for that. british prime minister david cameron is hoping to make the uk passage to india, working on a special relationship between the two nations. we'll have the latest on his trip from dehli.

>> and it's still london's fashion week, yes, strutting its stuff, but how luxury brands are faring. we talk to ceo angela aarons. we'll hear from her later in the show. and taking the positive u.s. housing numbers from the nhab numbers. we'll be in new york with analysis at 11:45 cet. >> the italian election race is heating up. there is less than a week before voters head to the polls. comedian turns politician beppe grillo, in fact, is owes closing in on sylvia berlusconi for second place. official polls can no longer be published. the private polls seen by reuter s suggest mario monti may, in fact b with be something of a

spoiler. >> and the election largely coming down to five key candidates. the front-runner is bersani. he's the leader of the center left pd party, calling for growth measures alongside monte's plan. sylvia berlusconi is threatening to make a political comeback despite corruption scandals. we've mentioned the comedian beppe grillo. at the same time, the former caretaker mario monti, he's been struggling to gain ground in his first ever political campaign. and then last, not necessarily least, there's the civil revolution leader and former public prosecutor antonio ingrola. >> only in italian politics. as the election draws closer, sylvia berlusconi has released a five-point tax plan in a

last-minute attempt to lure voters. someone who can tell us about that is julia chatterly joining us from milan where she's been keeping an eye on the ground. hi. >> hi, kelly. as you said, it's interesting timing for berlusconi on this particularly given this suggestion that he's getting back in politics to discuss his legal issues. he's announced a five-point plan and quite frankly, something that needs addressed in this country, it needs simplified and refining. i have to find this quite strange. point four suggests authorities should acknowledge good faith and point number five, fiscal rules should be respected without fear. he's already offered a tax amnesty if he wins this election. mr. berlusconi, if you're watching, we would love to speak to you about your election.

it is great comparing the old guard such as sylvia berlusconi and the new guard. you might be able to hear the crashing and banging going on behind me. there will be a big rally going on tonight fort bepe grillo, the leader of the five-star movement. i'm going to speak to him later on. i also managed to karch up with the mayor of milan yesterday, too. i asked him about the gains we're seeing in the link to this segment about the gains that he's been making, particularly in the last week, according to the secret poll readings. and i asked him whether he understands the sentiment surrounding these anti-austerity, anti-european parties. this is what he had to say. >> translator: yes. i understand that sentiment. i shared that sentiment long before grillo came on the scene.

i, too, favor more transparency. i tripped councilmen of all the perks. we don't have expensive limo service for our officials, no more free tickets for the opera. we've made equitable choices. >> this is a vital region in terms of its proportion of growth. what are businesses here saying to you about the economic outlook and what happens post the election? >> businesses are in dire straig straits, especially sme. they're having problems accessing credit, having difficulty getting projects started and above all, unemployment rises. once more, unlike the illusionist, and those who make promises that will never be fulfilled, my city has demonstrated you can make real

contributions to provide the economy to businesses in trouble. we pay off our debt to business necessary time and this prevents companies from going bankrupt. but they still need help. we need to reduce the fiscal pressure and cut the cost of employment without damaging workers and their rights. >> it's fashion week here in milan. you only have to be here to get the sense of pride that people feel about this industry. how do you get that to translate to other sectors and the political system, too? >> translator: i think we can bring back pride to our politics giving a strong sign of renewal. i was in the uk and when i said i was a lawyer from italy, from milan, all people could talk about was bunga bunga. now that has changed. i've been invited to talk about the school of economics. i see when i go abroad, when foreign officials come to milan, the city is once again a focal point and there's a willingness

to discuss and trade. >> the more foishlgs and public i speak to here, the more concerned i get about the risks of forming a stable government after this weekend's election. and remember, this key factor around 30% of this population still undecided on who they're going vote for. so i think this rally for beppe grilliot isn't going to be very important in terms of sentiment right now. i'm going to be speaking to him later and we'll have that interview on closing bell. so come back to us. guys, for now, it's back to you. >> i was just thinking, you should ask him about the comments from the japanese prime minister who suggested that everybody in italy has gone out and spent their money and they haven't saved it like in japan. so get some feedback from that, right? >> yeah, i will. 11% savings rate here, by the way. >> exactly. >> interesting. >> exactly. which is why they may slightly disagree with those comments. meanwhile, italy is attracting criticism. the finance minister is taking a

swipe at italians suggesting that excessive spending is a national trait. also, the italians see very little merit to living within their means according to the japanese finance minister and he references his only italian friends saying they prefer fought to have savings when they die can clearly jules has just disproven. >> i don't understand in this situation why he would want to point the finger at italians in a tongue and cheek away even at a time when japan is trying to increase its domestic assumption. >> they never had the borrowing bench that we had in pain. >> in fairness to italy, why is their rate of savings the way it is? because they need wealth to draw on at the end of their lives. but it has changed. there was one recent survey showing a third of italians now have a negative savings rate.

>> i'm just waiting for his italian friends to -- >> to weigh in on that one. maybe we can get a sense on the grouped of ow those comments are going are going down. >> tweet us, @cnbcwhite s wex. >> are you a saver or a spender? tell us where you're writing from and what your personal savings rate is. how about that? e-mail us, worldwide@cnbc.com. british prime minister david can cameron says he's keen to return to the private sector. he says the government is still considering giving away its 82% stake to the public by 2014.201. he's called for the government to cut red tape and give british

business a boost. with the latest on this other special relationship, sri is joining us from mumbai. a lot has been made of this, the size of the delegation, the make up, it's a lot of smes, cambridges as well as the big business. how is the trip being perceived in india? >> well, it's being perceived in pretty much the same way it is in the uk and the reason is because of the super size delegation that david cameron has come to india with. as far as in particular sector, the concerned sector and the uk has been insisting they need to he up financial services. companies like lloyd's have been wanting to escape themselves in india for the longest time. tesco is another british company

that has been very eager to have its concerns allayed but investing in india, it has a cash and carry business in india. the indian regulations have changed very recently, but they are complex and tesco has been having a conversation, we understand, with david cameron and has asked him to take up this matter with his indian counterparts. this is an important relationship with both countries. as far as david cameron is concerned, he wants to get more indian money into the uk, india has emerged as the second largest job creator for the uk. 700 indian companies operating in the uk currently ask about $20 billion invested by indian companies into the uk. as far as india is concerned, they want investments into the infrastructure sector. there is talk about the bangalor highway corridor project that the uk may look into. they also want investment coming in as far as the retail sector is concerned because that has

been an issue where after a lot of battling and wrangling, the uk government has finally managed to change the regulations. both prime ministers david cameron and indian prime minister apparently share a very close, personal relationship, which is why you've actually seen cameron coming back to india in less that 2 1/2 years. but that controversial issue of the vodafone tax has not been taken up by either the prime minister or finance minister so far. i'm sure there's a lot of back channel discussion going on. but net/net, there's plenty of excitement and enthusiasm. we will have to say what this actually results in as far as investment res concerned. we will be able to give you that detail at the end of this meeting. >> looking forward to it. thanks very much. >> all right. so just over an hour and 40

minutes into the trading day in europe, we're weighted to the upside, 7 to 2 advancers outpacing decliners on the dow jones stoxx 600. the ftse 100 still maintaining its levels above 6300. not up by much, just four points. we're going to wait for the u.s. to come back into play before we get any meaningful direction. the ibex up 0.16%, the cac 40 up 0.6%. the xetra dax up 0.4%. vodafone stock down 2.87 for the mobile operator. they're focused on whether they're going to buy do you h e deutschland. ten year italian rates, 4. %. slightly lower today, spanish yields 5.23%.

sterling still down near that seven-month low against the dollar. 1.5488. we hit 1.5438. aussie/dollar, still on the 1.03 handle. dollar/yen, yesterday we peaked around 94. right now, 93.43. and euro/dollar, contained at 1.3348. so really, not major directions there. in asia, let's bring you up to speed about what's been happening. li sixuan joins us out of singapore. >> hi, thank you, ross. more aggressive easing is downplayed in japan. adding to the markets restraint, the decision on the next boj governor is put off until next week. the nikkei eased 0.3% while the yen has strengthened against the

u.s. dollar. heavyweight banuc weighed on the market after a sharp drop in machine orders to china. fanuc showed positive results. financials continued to lose ground after the pboc drained liquidity from the markets for the first time in more than seven months. property measures tumbled some 4.8% on fears of more cooling measures. it's home prices continue to grow. meanwhile, hong kong and developers with significant mainland portfolio came under pressure weighing on the hang seng index which lost about 1% today. elsewhere, south korea's kospi ended higher by 0.2%. automakers staged a strong rebound while investors watch the yen and its impact on korean

exporters. in australia, the central bank left the door open for more interest rate cuts. positive earnings news continued to lift sendment. india's sensex in action trading higher by 0.1%. back to you, ross. >> thanks for that. see you a little later, sixuan. coming up on the program, htc is launching its news mobile divide in new york and london today. we will, in fact, chat with the ceo later. we will find out exactly what this phone is called and whether it can turn the company around. we'll be right back. >> okay. >> waiting on the one.

would to the program. another big name u.s. merger is in the works. office max and office depot are in talks that could be announced midweek. reports say it would be an all-stock deal. the price? still up in the air. one of office max's largest shareholders said it would

support a merger and would support a dividend. who wouldn't. office depot, office max, shares you can see there. most of the upside gains coming with office max. office depot closed slightly lower, staples down a bit, as well. but the big deal that helped recent m&a is a planned buy out of dell. a good set of results could embolden investors who argue michael dell is buying his company on the chief. so for more on what to expect, mark o'hare joins us now. mark, welcome. >> good morning. >> so talk a little bit about dell. what do you expect to hear from the company today? >> well, who knows what the results will be, but what's very clear is this is -- you know, it could be a bellwether buyout for the -- what i suspect will be an

upturn in big buyouts. we saw back in '04, '05, the top five buyouts and each year we're accounting for $40 billion, $50 billion in '06 and '07. that rose to 150. in '08, '09, '10, it's been around the billion level. there haven't been any any. now we've had two big buyouts already at dell and heinz, both in the mid 20s. >> he's got this car pricing pretty cheap. do you suspect if this buyout is going to happen, he's going to have to up it quite a lot? >> well, look, on the run hand, we know some of the big incumbent shareholders are arguing that very point. on the other hand, the big is a 25% premium to the price before it was announced. so it's -- >> for a company which doesn't have great earnings visibility, just to remind people, we're looking for them to report on average 39 cents a share. that's down from 51 cents a year

earlier. revenue of about 14 billion down about 12% from a year earlier. again, a secular down trend in their earnings trajectory. that will seem to argue for shareholders note trying to hold out for too much here. >> not to trying and be too cute, absolutely. so it doesn't look cheap. it doesn't look overly expensive. >> well, they're saying that they undervalued the company because it's eight times earnings $3 a share net cash. they say that would make it the cheapest valuation on a major lbo in a decade. >> and if i look at my figures for them at about 4.4, it's a five-times multiple. so, yes, it does look not too expensive, absolutely. will they to pay more? i don't know. it's a business that has issues. it's not slam dunk. >> how about this view of a dutch auction? ie, and allowing those who want to stay in stay in and those who want to sell get out. do those sort of things work?

>> they absolutely can do, yes. and that side steps the issue about is he buying it at the cheap? if you think that, stay with it. if you don't, take the money. >>. >> is it going to be shareholders getting -- are they going to be able to dictate the determines or are they going to end up taking the money and saying, fine? >> and i think a good analogy to look at is the heinz one that's happening at the same time. by my reckoning, the ibitda is 3.9% times. we have a remarkably solid business and with what looks like quite a toppy price. i wouldn't say we've seen the end of high prices. >> with heinz, you've got a lot

of visibility. absolutely right. >> and dell is a -- you know, is a situation for a buyout. it's a business that has some issues that needs some stern action taken. do that away from the glare of quarterly reporters. >> how long is this sweet spot going to last for raising money for buyouts right now? clearly, money is pretty cheap. so, you know, are we in a -- do you think we're in a small window or -- will it last a while? >> do you know what? i don't think we are. back in 2008, we all said this would never happen again. but the oldest saying in the market is, you know, it's easy to be a financial genius. all you need is a short memory and a bull market. and we're seeing that. but the leverage is back there. look at multiples on all buyout deals. small, medium, large, they have gone up. i don't think it's a window.

i think it's potentially the beginning of a sustained effort. >> why do you say that? >> because if you think back to the financial crisis that what pundits lining up to predict the end of the buyout model, you know, companies have been bought too expensively, too much leverage, half the firms would disappear. you now fast forward to 2013. look at the returns of pension funds on asset classes and private equity is top of the pile. it's come through very well. there were problems in the crash. returns are back to almost where they were before. so it's come through very well. buyout firms the top five buyout firms globally have $50 billion of dry powder available to them. the buyout industry as a whole has almost 300 the. >> that's a lot of money burning holes in someone's pocket. >> thanks for joining us.

>> stick around. straight ahead on the program, it is london fashion week. how are luxury brands faring? coming up, we'll hear how burberry is cashing in on cool britannica. britain is having a real moment. i think the last few years have been amazing for england. there's so much been going on and it's a great moment to be proud to be english, for sure.

european stocks are in the green. it's a slowdown in sales. analysts like the organic growth number pes. >> auto shares trading lower as data shows new car registrations slumped to an all-time low in january. >> the government delays its decision on the next bank of japan governor. is this the beginning of a more moderate japanese agenda? and the rich and beautiful all in london for fashion week. critics and fans hailed the show yesterday. we were there, coming up. >> meanwhile, european stocks

today are firmer, up 0.5%. the ibex is up 0.3%. on the bond market, kel? >> take a look at what is happening. spain and italy are absolutely lower. markets don't look too unsettled about it. gilts, ross, 2.2%. i'm sorry, this story, the more we can talk about what's happening, what market signal is being sent by the fact that gilt yields are rising while sterling is weakening and there's questions about the uk inflation outlook, the better. >> yep. sterling is down at seven-month lows against the dollar. 11.5438. we're just above that at the moment as you can see. 1.5488. dollar/yen, below 94. 933.51. euro slrl dosh, 1.3353.

>> dollar/yen giving up 0.5%. japan's finance minister dismissed the speculation that the government will buy currency bonds as part of its foreign easing. aso added the government isn't plannin to revise the boj law that guarantees the central bank's independence. japan's finance minister has been busy downplaying the prospect of foreign bond buying. is this just politics, fus had i ko? >> hi, kelly. the tokyo stocks declined today as the yen strengthened after the finance minister denied expectations for foreign bond buying as part of monetary easing. the government is not thinking about asking the bank of japan to consider buying foreign bonds since it may be viewed as currency intervention. aso said the government is not revising the boj law. so the central bank would not be

threatened. regarding the boj, japan's chief cabinet, the government will likely propose its candidate for the central bank's new governor next week. prime minister ship zoe abe will leave for washington this thursday to meet president obama and will return to japan on sunday. abe will likely pick the possible candidate after returning to japan. abe's pushing for aggressive monetary easing. he will bick a nominee who supports his vision to achieve the 2% inflation target. the leading candidates for the boj governor include toshiro muto. a another prominent county is haruhiko kuroda. the asian development bank's president for a 2% inflation target and was a top currency diplomate in the late 1990s. kazamata iowata is a strong

candidate. he's an advocate of more quantitative easing. the current boj chief will step down on march 19th. back to you, kelly. >> let's get a view on this from michael plasnik. so where does the yen go from here? >> i think it's important to take into context the comments made by abe and aso. you have to reverse engineer the situation. they're not going to be able to hit a 2% inflation without a significant yen weakness. so they need the yen to weaken about 40%, auto% in order to get 4% inflation over a two-year period. so if you reverse engineer from there, you say, what do you need to do to get the yen weakness? i think they're willing to do anything it takes.

>> that's extraordinary. was that impressive? >> it's about a 50% depreciation in the yen. 15% pass through. that's 4% inflation. is it unprecedented? i mean, yes. yes and no, right? over a prolonged the period of time. we saw 160 a few years ago. >> interesting thing, michael. japanese bond yields hit record lows. clearly the bond market isn't saying they're going to be success in creating intlagz. what the yields are saying is they're willing to do whatever it takes. today if they take foreign bond yields off the table, they're going to have to do it through significant easing. personally, i think foreign bond purchases are not out of the question. coming out after the weekend of g7 and g20, it's difficult for

them to come out and say we're going to do this significantly and we're going to do it. abe is extremely strong ninetier national. i think the way they do it is they'll start off with so much wealth fund. they'll buy treasuries and usf funds. they set up a sovereign wealth fund and this is what they're going to do and buy international bonds, it's difficult for them to do this because there's other countries that do this. >> especially the extent to which japan might be buying, for example, euro denominated debt, tier going to only push that currency higher at a time when all the other currencies across the world are heading lower. how much pressure does that put on europe? >> a lot of pressure on europe. euro/yen has had one of the biggest moves. and in response, i think we'll see response from the european policymakers.

and we will make our decision of a stronger euro on that. so what i think you'll see is the world right now is divided into the known versus the unknown policy, the known policy being the feds doing qe that we already know. the ecb slippinging its balance sheet. the unknowns are the japaneses, the rba, the bank of england. you were speaking about earlier in the intro about the pound going off and gilt are selling off and the yields are going higher. those are all unknowns. and in the unknowns, the policy is rebounding in weaker currency. >> michael, what is your target on dollar/yen? where is yen going to go? we're finding it hard to get above 94.5. >> it will continue to move

higher. at the end of the year, we'll be well above 100. >> again, i think it's a reverse engineer problem. i think in order to get to 2% yen inge tlagz, they're going to have to continue to push weakness. >> now some news out of prada, we're keeping a close eye on luxury today. 3.3 billion euros, that stock outperformed the hong kong market. i was at the cat walk yesterday in london as london fashion week draws here. angela aaron, tune into that interview come up in just a couple of minutes on the program. >> looking forward to that. meanwhile, the latest conversation amid the product with horse meat in its product. let's get more on this.

carolyn, of course, is in london this week. she's on set with us. >> so nice to have her right around the table. >> and that is a big surprise. nestle held a big press conference for full year results and there are many questions about that, obviously. nestle said, no, we're not exposed. we did not find any traces of horse dna in our products. but then yesterday, as ross said, it had withdrawn two pasta products, bee raf olely and beef tortellinni. the levels of horse meat found in those products, it was higher than the 1% threshold that the food safety organization in the uk uses to indicate whether there was gross mental or not. it is a little intarsing for nestle. it's saying in a statement, we want to apologize to consumer, assure them that the right action ves been taken and deal

with this. >> again, nestle wasn't even shielded from this. you would think that this is one of the best managed food companies in the world, but not really. it's not having an impact on the stocks. shares are higher by 0.4%, but, again, that's on the back of dunham. >> thanks for that, carolin. we have spanish auction resus. >>pa h sbo0.9 millionuros of three-month lls. that's down from the 1.2 billion th isold at prior aukdz. the three-month bid to cover ratio 5.8 significantly higher from 4.2 the last time around. as for the nine month, it sold just over 3 billion eos worth with the bid to cover at 2.3. should get those yields through shortly for you. three-month, 0.45 versus 0.46% during the last auction on january 22nd. ross, bottom line, we saw this in the curve before the auction, not anticipating any major moves

here. >> no. meanwhile, back to the food sector from the new zealand based exporters clarified that they have not been destroyed over quality concerns. earlier today, the kiwi dollar was weakened by a report baby formula made from milk powder didn't meet expectations. >> and shares in danone are trading higher after they released larger than expected sales. ames to cut 900 jobs and cautions it won't return to strong profitable growth until 2014. shares responding up 5%. analysts have taken a more optimistic view. socgen has reached a turning point. the company's risk/reward profile and goldman weighing in say they like the group's organic growth number. organic yogurt.

>> bmw is recalling more than 500,000 vehicles to correct potential problems with the electrical systems. the recall covers one series of model years between 2008 and '12. various three series models and the sports cars built in 2011. issues involve a faulty connection between the positive battery and the fuse box which in some cases can cause the vehicle to stall. lots happening, of course, in auto news this morning. european car registration did slump to a record low last month, pointing to ongoing weakness for the sector. registrations were down 8.5% in january. this is not a seasonal issue. most manufacturers reported lower registrations for the month, as well, including bmw and daimler. bmw having its own issues today. >> exactly.

it's interesting to mention, autos are one of the better performers on the stocks up 0.7% today. bridgestone shares are up today in japan as the world's tiremaker jumped to a record $2.5 billion. a weakening yen will raise raw material costs, but they say that will be offset from profits from its high margin exports. up 16% over just the last seven sessions. >> if you want to respond to anything you've heard on the show this morning been buying a car in europe, not buying a car in europe? worldwide@cnbc.com. still to come on the show -- >> burberry defended its new

collection at fashion week this week. find out what was said about a happy new year for growth in china. we'll be right back. great, everybody made it. we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.

kwoib to the program. on the nine-month span asia auctions, in both cases, pretty high bid to cover ratios. the yields were up just a touch from the last go around on january 22nd. you can see the reaction across spain, not a huge one for the most part. bonds are moving a little lower. the ten-year is at 5.22% this morning, ross. >> meanwhile, criticism among indonesia's rules are causing concern. chevron earlier said it would cut back its indonesian

investments because of confusing and contradictory rules. different story, but u.s. regulators, meanwhile, are reportedly probing big price swings and natural gas prices over the last year. these moves would come right before the release of weekly inventory data. they have stepped up its view of data. so far, it reportedly appears the price swings have been due to high frequency traders take advantage of spikes and roll tilt. and japanese regulators say cells on a 787 dreamliner have showed additional swelling. two of the eight cells in the second battery showed bumps. it's investigating further to determine whether this is irregular or not. boeing's rival airbus said it's dropping plans to use the lithium ion batteries in favor of the traditional ones.

on friday, the s.e.c. filed suits against unidentified traderes and received a court order to freeze assets in their accounts. an s.e.c. spokesman said the assets were frozen in the u.s., not switzerland. the agency wouldn't need swiss help to identify the account holders. the u.s. court can't by itself freeze assets in an accounting to operate in switzerland. >> now, htc is hoping they found the one, as they launch a new mobile device in new york and london today. many hints have been dropped down the line and the new hand set is rumored to have ultra technology. analysts say this could be a make or break event. we're joined now with more. welcome. we're joking that they pound the one, but we don't actually know what this device is going to be called. what do we know about it? >> we don't know anything about

the device set for now. but there's been rumors about the device. it's going be a smartphone, for sure. we even said joking to that, it would be the one that could enhance their market share in the smartphone segment. >> it will be a tablet instead of a -- >> well, again, some say it's 4.5, some say it's 5, which falls into the tablet category. but from what we have seen from screen shots from leagues to majors, from reviewes and previews, it's going to about be great. it's looking good. but that's just -- >> it's good in a way. >> how much do they need it to be the one? they used to be the manufacturer of android products. they've lost a huge amount to samsung. >> let's look at their market share. in 2012 regarding the smartphone shipments, it was a candidate

for almost six person, that's a drop from 10% in 2011. >> just 6%? >> 6% of the smartphones in 2012. that's a drop. that's a big thing. that referred to 6 million shipments compared to 40 million in 2011. over the past 12 months, they've lost their way big time. even the smartphone device market. so at the top end, you have apple and the most established players. then you have the new players coming into the market. the lower end smartphone markets. so this is from samsung and the recommendation of the smartphone industry has, in fact, infected the initial segments they had when they launched initially, labelling some of the google android devices. >> it's funny, htc, i remember this story, kind of came out of nowhere to grab a big share of the global market when they

partnered with android and it was an alternative to apple. now a lot of people have gotten into this space. what does this company define itself as? >> it was a good device to have. but then they launched the later reiterations. highways good among consumers. they need this device to be great. from what little we even, it's going to to be a great device. >> how much they have to discount the product? it's interesting to look at the timing, as well, right before mobile congress next week. why not announce this at the event? >> i think it's a marketing. i may be wrong, but if you look

at apple and samsung, they launch their flagship devices. ebl they believe it will be the device range which will change their fortune. so i think that's why they're going for the launch. >> apple slipped quite a lot in china in the smartphone league. and i know we were waiting for the launch of the latest data. do you think they're going to claw back? >> it's a tricky situation for hsbc asset brand. at the higher end, you have apple. you take the chinese market, there are smaller players and

cloners which are bringing out devices catering to the emerging markets, the lower end of the smartphone markets. and price point is key here. those devices, they may not have the same functionalities. but they're offering the same quality or the same device functionality at cheaper rates. so that's why, you know, smaller players have been successful and that's one reason why the market shares go a bit from htp. >> thanks very much for joining us. >> and tune in tomorrow as we'll have an exclusive interview with htc's ceo. now, nat rothschild chances of taking control have hit complications. the sale removes viting right

restrictions on the takeover panel. this boosts the odds of the current board of bumi remaining in place preventing rothschild from maintaining control. he looses out on this one, ross. >> the pr'ing has been extraordinary. on monday, they began a five-day stoppage in protests of the workforce. hundreds of flights have been canceled and the biggest strike yet to hit loss making airlines. management says the restructuring is essential. today marks the second day of a five hi day walk out this week with further stoppages planned tore march. and police said the attacks at the angelo american mine

occurred after beating forecasts. a a so has been defending tokyo's monetary policy. the italians see very little merits of living within their means. he referenced his own italian friends saying they prefer not to have savings when they die. it was extraordinary comments and we've been asking for your feedback on this. jeff tweeted and saying he would love to be a saver, but he's getting used to living cheap. keep those comments coming. what is going on with bp? >> we are going to take a quick break. just want to tell you that the bp says it will defend itself in court against claims and that they were always open to settlement and reasonable terms.

we'll have more detail. we'll bring it to you after the break. stick with us on "worldwide exchange."

welcome to "worldwide exchange."

i'm kelly evans. >> and i'm ross westgate here are your headlines tr around the world. >> european stocks are in the way with danone leading the way. analysts like the organic growth number. data shows new car registrations across the eu slipped to an all-time low in january. >> japan's finance minister pours cold water on the next bank of japan governor. is this the beginning of a more moderate japanese agenda? >> we are better than expected dew data. bond futures are falling. let me tell you exactly -- >> current conditions, the forecast for 9 and 35. expectations came in at 48. >> 48.2. but 31.5 in january.

we had a big jump up in january. 35 was the poll. current conditions index, 5.2 with 7.1 in january. so the current conditions have actually dropped. >> but markets loved the fact that the outlook has risen. and, in fact, after a strong survey last month, this one even stronger, we know people love to say that the zew survey only surveys investors, it's overly optimistic. >> my favorite quote here, financial market experts have made their peace with the weak fourth quarter. >> that's strange. >> i'm over it, i dealt with it, i got therapy and i parked it. >> it's easy to make your peace when the market is rallying. >> we know we're going to get the ifo survey friday. there was a sense that despite the weak period for ddp was

bottoming. now with the onus on the data show that the optimism is warranted. >> yes. have you made peace with the fourth quarter? you didn't really fall out with the fourth quarter, did you? >> no. i was very troubled with the fourth quarter. i have not made my peace, but i was not surveyed. bp is heading to trial. bp out saying that 3.1 million barrels should be the uppermost size limit to the assessment of its bill sign. it has said that about 800,000 barrels of oil captured from the gulf should not be subject to a fine. it believes it was not grossly negligent in the gulf oil spiel with the deepwater horizon accident from a couple of years ago. it says the simt is overstated by 20% and that it will defend itself in court against u.s. government oil spill claims. >> so the german economic indicator is at the highest levels of 2010.

mella, we've just seen here this growth. investors have come and made their peace with the weak fourth quarter. is that weak fourth quarter going to linger or not? >> no. thank you very much for having me on your show. definitely not. the expected germany will be one of the first eurozone countries to actually see a stronger q1 force and even a positive number in the first quarter. so we definitely think that the weakness that you saw in q4 is well and truly behind and germany will be one of the outperformers once again in 2013. >> right. okay. how much stronger are we talking about? >> something like 0.6% growth this year. if you bear in mind that countries like spain and italy are still very much mired in

recession and looking at deeper recessions of 2% this year, then germany's economic recovery looks quite decent. and that would be something that would give heart hopefully to the countries, as well, because they'll be hoping to export, especially if this recovery is domestic led. >> yeah. what about at the end of. >> week, we'll get the eu with the latest economic forecast and is what they might say about this budget defn france and spain. are they going to get -- those targets are going to get downgraded and then, you know, what are we going to do with that? we still get weaker growth in these countries, we're never going to meet any budget targets thes. >> no, you're vitely right. i think for spain we are going to see the target having been missed in 2012. they will have on to revise up the target for this year. it's at 4.5%. it has to be raised because it's very risky and the kind of growth that we're expecting which is more like minus the 2%

growth for spain. it's going to be about having a medium term plan, having more time to reach the 3% deficit targets. you are going to see a vision. growth is very weak. it's very difficult for the economy to lower its budget deficit with such weak growth numbers. >> all right. we'll come back to you in just a second. thank you. >> yes. in the meantime, we want to check in on markets. u.s. markets will reopen today after closing yesterday in honor of presidents' day. they are trying to open higher. dow jones industrial average looking to open about 25 points at the open. 1519 is potentially the levels that we're looking at for the s&p which has been on something like a seven-week win streak and has come through earnings season despite a number of preannouncements holding up reasonably well. despite the initial spike in volatility, we've seen things settle back down. that move is reflected in global

trade. perhaps there's a sense of lack of catalyst out there aside from japan. let's take a look at what's been happening with european markets in trade today. the ftse 100 is up about 0.3%. we did just get some news with regard to bp contesting the claims in a trial with the u.s. government. its shares, though, roughly unchanged. xetra dax adding 0.8%. interesting to see germany the strong performer here in europe. this following the zew survey. which would show the expectations index stronger than expected. quickly, the cac 40 up 1% today. the ibex adding 0.5%. a reasonably strong start, we should say. >> you don't understand how the ingrashation is coming. it's going very, very well. i'm very happy with the way the process is sitting into brit is going. this is where we stand in terms of individual stocks. danone doing very well, up 4.6%.

this is on the back of their cost cutting program. sales coming in better than expected. but i think everybody could work that out for themselves. v did on a phone shares, the mobile operator down nearly 3% at the moment. cutting its rating from market perform to underperform. this is following recent market talk that it's now considering buying germany's cable do you haveland. interesting moves, vodafone feeling it has to get into fixed line, hard wire because of bundling arrangements. and they can't necessarily compete with other operators who are mobile and fix and bundle it altogether. on the bund market, it's about italy this week. on thursday, we're going to get a ten-year bond sale out of spain. that's going to provide the focus. we keep talking about this gilt yield had i heading higher. the pound is also weak, down at seven-month lows of 1.5448 is

where we hit on sterling/dollar. aussie/dollar is steady. yen a little firmer today, moving away from that 94 level of 33-month highs. euro/dollar, a little firmer after the zew survey. 1.3364. and to be fair, kelly, i've never heard anybody call it the zew. but anyway, not as far as i know. let's find out, let's remind ourselves what happened in asia overnight. li sixuan rejoins us from singapore. >> thank you, ross. the yen is still a key driver in asian markets today. the currency gained versus the dollar after finance minister taro aso dismissed talk of foreign bond buying by the boj. adding to the markets restraint, the decision on the next boj governor is put off until next week. the nikkei eased 0.3%. heavyweights weighed on the market as data showed a sharp drop in machine tool orders to

china. but bridgestone shares soared to a seven-year high after posting strong q4 results. but another disappointing showing from china, the shanghai composite was down for the second day in a row. financials continued after liquidity drained from the markets for the first time in more than seven months. property shares tumbled on fears of its cooling prices. meanwhile, hong kong developers with some project ended weaker, dragging the hang seng index down by 1%. elsewhere, south korea's kospi ended higher by 0.2%. automakers gained on bargain hunting. in australia, the central bank has played wait and see on interest rates and the stock market set another fresh 4 1/2 year high as positive earnings news continued to lift sentiment. india's sensex finished higher by 0.7%. back to you.

>> sixuan, thank you. >> now let's pivot, ask take a look at what's on the agenda in the u.s. the national association of home builders puts out its numbers at 10:00 a.m. we'll be this bes from dell, march yot, herbalife, adi, medtronic, express scripts, sealed air. >> madher, i'm guessing bubble wrap isn't your favorite economic indicator for the u.s. but what, in fact, do you think when you look at growth prospects this year? we are just days away from the sequester hitting. we saw jpmorgan downgrade its forecast. what's your own view? >> i think they've been quite conservative right from the beginning. it's a trend we've seen over the past many years that people tend to be very optimistic of the

turn of the -- for the u.s. economy. it's happened over the last five years. people start forecasts very, very positively and then they tend to revise down their forecasts. we've been quite cautious. we're looking for close about 1.7% growth this year. it's going to be growth, but it's not a great recovery. >> how much of a drag gas prices, retail gasoline price res? up 32 days in a row or something like that? >> i think there are a few other. gasoline prices, of course, but the expectation is that they will remain stable or, you know, they won't ramp up too much unless you have some massive supply side shock. but it's more to do with things like the fiscal drag that you just mentioned, the fact that you don't have clarity on whether taxes are going up, what's going to to happen to your consumption levels. these are the key factors that make us a little bit more cautious from a u.s. outlook. >> any change in fed policy? they just keep going? >> they just keep going, at

least for this year. i think they very early late laid out the rules by which they will change their policy, substantial improvement in the labor market and for the interest rate in particular for the labor -- for unemployment to fall. and that we're not seeing forecasting for this ar ybin a well. >> yeah. i mean, how much of sort of a fight will go on between the fed and japan? i'm wondering -- because clearly japan is going to wrap up and where that leaves the eurozone and the euro. >> i think that's a great question. i think maybe we are one of the few houses that are more cautious about this whole weakness stowe story because we are actually forecasting the yen to strengthen by the end of the year and for precisely the reasons that you're pointing out, that maybe it's well and good to have aspirations to reach 2% inflation target. but do you really have the tools

to implement and achieve those goals? we're not convinced that they're going to implement anything dramatically different from what they've done already to reach those targets. maybe we'll be disappointed by how much ramping up they do. that is why you'll see jpy appreciate again towards the end of this year. >> okay. we'll get into that in a little bit more depth. for now, stick around. more to come from you. >> yes. and the announcement of the new bank of japan chief has been delayed until next week. who is in the running? we'll discuss the favorites after the break. stay tuned. ♪ ♪ ♪ [ male announcer ] what's the point

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welcome back to "worldwide exchange." >> danone unveils a cost savings plan. and office max and office depot reportedly are looking at a tie-up. >> just after news of berkshire buying heinz, krpz has learned office max and office depot are in talks and a deal could be announced midweek. they're aimed at taking on larger rival staples not to

mention amazon.com. reports say it would be an all stock deal but the price is still up in the air. reports say as a concession, office depot would likely sell 50% of its stake in its mexican unit. shares, we can take a look in early frankfurt at how they're responding to office max, up nearly 6%. office depot is down 1% and staples is fractionally lower, as well. paris has dismissed speculation that the government will buy foreign bonds as part of its easing. the government will not be very rising the central bank's law. at the same time, they appointed the next chief of the bank of japan is being delayed, as well. >> what's interesting is they said we're not thinking of buying foreign bonds, yields on jjb and then hit record lows.

so, look, they're going to try and boost inflation. but is that going to have any impact on jjb prices? >> that's a good question. we do expect that they will do more qe and, obviously, that will find its way into local government bonds. and that can obviously have an impact on the yields, as well. but in terms of the wider, more radical issues that are being considered, we really do think that it will be tight, not just by international pressure, but also by their own caution and worries about what impact that would actually have on the economy and inflation. you don't really know what the ramping up aggressively is going to hit your growth and inflation target or overshoot it in some way. and i think even the boj members themselves are very cautious about not overdoing things. so we really don't think that they're going to be able to implement anything that's dramatically different from what they have done in the past. and that's really the bottom

line for why you're going to see more, but you're going to see more of the same. >> all right. thanks for that. good to see you today. italy is also attracting criticism, but from an unlikely source. the japanese finance minister taro aso took an unusual swipe at italians suggesting that excessive spending is a national traid trait. while japanese people value savings, the italians apparently see very little merit to living within their means. he referenced his own italian friends saying they prefer not to have savings when they die. >> still reasonably high compared to the west. she said 11%. it's fallen significantly since the early '90s. but it's interesting, aso's comments come at a time when he's sort of -- he's being a little bit condescending about the italians and nevertheless japan is trying to boost its own domestic consumption.

sort of strange the. >> if you are italian friends of mr. aso, we would like to know what you think. do you not want any savings when you die? i don't want to inherit -- maybe it's a good idea. maybe it's tax efficient to have no savings wh die. >> you could guess they're perhaps headed higher at this point. but that's why the italian elections are heading weaker. >> how about the tax estate? >> what they usually do is it will go away for a year or so while they're trying to figure out the long-term rates. maybe higher at the top. >> is there a cap on -- >> yes. it's only for the wealthiest states. but there's still questions about small businesses and it always comes up in these negotiations. anyway, send your thoughts in here. john had tweeted in today, if you're a saver and not a spender, you have to watch out in case of emergencies which come up often. i'm a saver, not a spender, that is. keep your responds coming.

worldwide@cnbcwex. later on the program, hugo chavez makes his return to venezuela. we'll be right back. to grow, we have to boost our social media visibility. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex.

hugo chavez has made a

surprise return to venezuela after two months of cancer treatment in cuba. this comes shortly after venezuela announced a currency devaluation taking the to a previous 4.3 bolevars per dollar. it's pretty expensive for international companies operating in venezuela. merck, telefonica are both taking a hit on their assets. on the phone with us now from raleigh, north carolina, is a i asti. thank you very much for your time today. >> good morning. >> if investors want to play a weaker theme, how do they do that? >> well, the bolivar theme is a difficult one to begin with. maybe a little bit of background on the pipe some of these companies find themselves in. most of these multi nationals

have pretty small skoes yif to venezuela. it's 1% or 2% or a%. but it's an expose i couldn't have your that can have an outside impact on the pnl. a 32% devaluation wipes out a good part of the company's gross margins on its venezuela sales. then on gas standards, you've got to re-val your balance sheets. so you take another charge against earnings. and companies in venezuela are subject to several unique limitations. chavez's government has made it nearly impossible to repatriate assets. so if you've got kap cash on your balance sheet sitting there in venezuela, it's stick. and every time they devalue, that cash loses its value. secondly, the price mandates that chavez instituted last year also is a crimp on these

companies because you can't price your way out of the devaluations. the government has prohibited several companies from raising prices 10 or 15 or 20%. so it's another limitation that they find themselves. >>. >> just wondering, too, if companies take this and investors take this as a cost of doing business in venezuela, is the market still attractive enough to justify a hit like this, especially if there's a process spkt of more to come? >> yeah. i think that this is -- again, we've had a couple of devaluations in the last few years. and i think some of these companies are beginning to want to cry uncle. the reason that venezuela has been so attractive historically is that they have been an oil exporting nation. they've had lots of oil revenues. and this is going on for decades. those revenues brought a lot of purchasing power to consumers. so it's a great market for multi nationals because the country itself doesn't manufacture a lot.

so you've got a receptive economy. you can bring your goods in and there's purchasing power there. thou, all of that potential keeps getting hit by chavez's -- i'll call it whimsical or material economic policy. and at this point, conglomerates might be thinking, look, the risks of doing business in venezuela are starting outweigh the benefits, especially when i look over to other parts of south america and see stable governments like chile and mexico where there's consumer potential. but at the same time, there's a more stable situation. >> we'll live it there, asit sharma joining us there and several companies announcing that they had to take a hit of this valuation. the real question and how much further that strong bolivar might weaken. and the president of

ecuador, president kocorrea has promised free education and universal health care even as he tries to lure private investors when ecuador returns to the bond market later this year. >> another round of options perhaps for us to keep an eye on. it is london fashion week. coming up, how burberry is trying to cash in on cool britania. still riding that wave from the olympics, too. we'll be right back. >> britain is having a real moment. i think the last few years have been amazing for england. there's so much been going on and it's a great moment to be proud to be english.

welcome back to "worldwide exchange." i'm kelly evans. >> and i'm ross westgate. >> through spikes after zew data out of germany shows investor sentiment at its highest level in neefrl two years. >> european stocks are now leading the way in the green. >> and office max and office depot want to be your one-stop shop for pens, papers and u.s. computer needs. they're reportedly in merger talks.

a quick check off markets, u.s. futures are pointing higher after being closed yesterday for presidents' day. 1519 is the level for the s&p which has been rallying now. european markets overnight are generally pointed higher, especially after that zew data. again, people like to poohpoo the data. nevertheless, we're continuing to see a market reaction. the euro is higher. the ftse is up by 0.3%. the xetra dax up 0.7%. it has been an outperformer for the last couple of sessions. the cac 40, up about 1% this morning. the ibex up 0.5%. the spanish t-bill office went off reasonably well this morning

helping to bolster sentiment. how do you make money in these markets? here is what some of our guests have been telling us all morning. >> i think the rebound in the euro, which we have been calling for since october, is not done yet. especially against the yen. >> we're very much with the consensus in the market, the trade is short yen, long nikkei hedged up currency. that's still the trade. it's a bit long in the tooth now in terms of technicals, but it's still the trade. >> i think bank of ireland bonds, the recent issues is strok interest. i think they're well affected from a capital perspective. they provide the yield, the duration metrics, what investors will be looking for. >> another big name u.s. merger

is in the works. cnbc has learned office max and office depot are in advanced talks for a deal that could be announced midweek. the office supply combo is aimed at taking on larger priefl staples. reports say it would be an all-stock deal but the price is still up in the air. one of office max's largest shareholders says it would prefagree to the merger, but would support a special dividend. nearly 6% in frankfurt trade this morning. staples down fractionally, suggesting they don't necessarily see an imminent threat here. the big deal that has helped define the recent upturn in m&a starts with dell. the good set could involve investors with michael dell is buying his company on the chief. earlier, we asked marco whether the dell deal was signaling a

comeback for large buyouts. >> back in 2008, we all said this would never happen again. the oldest saying in the market is it's easy to be a financial genius. all you need is a short permanent in and a bull market. we're seeing that. but the leverage is back there. you look at debt multiples. >> great stats on that which kelly has been tweeting about, as well. >> i've been trying not to. he said, look, there's 50 billion in dry powder. that's just equity at the 207 five private equity firms. >> 50 billion in equity ready to inje inject. >> and they could potentially do ten dell deals with that amount and frankly, that's just a small piece of the 300, 350 billion in quote/unquote dry powder or secretary that they have

worldwide. he also said for pungz funds looking back, pe has been at the top of the pack. that's why you're potentially going to see more of these deals happening as investors give them more capital. swiss regulators say they haven't been asked for alleged insider trading options before the heinz company announced it would be sold. the s.e.c. filed a suit against the traderes and received a court order to debase accounts. carolin who is here, normally in zurich, has been looking at this story. at some point this would do that, wouldn't it? >> yeah, certainly. it's been getting harry up to what the next level steps would be. essentially the s.e.c. spokesman said, look, we froze those accounts in the u.s. and the spokesperson for the swiss financial market authority came out and said, well, you can't really do that by itself but eventually, ross, you're vut lit rye. once the u.s. wants to find out who is behind the account, who

the account holders are in terms of their names, their details, they will have to ask for official help from the swiss authorities according to what we heard from the swiss authorities yesterday. that hasn't happened yet. we know the s.e.c. saw some unusual options trading in heinz on webs, the day before the deal was announced. more specifically, this relates to out of the money call owes heinz which made traders allegedly $1.7 million in profit pes we know it was a goldman sachs account in zurich and goldman sakes says it is working together with the s.e.c. >> is there any reason the u.s. shouldn't expect the swiss to kwom kw079 in providing additional details on this? >> not really. the two have been working together very, very well. in fact, i would think the u.s. authorities have the swiss authorities on speed dial because of the issues. >> good point. how many times have we seen this over the last couple of years?

carolin, good to see you this morning. the race is on as the italian elections heat up. stay tuned to find out how grillo is giving the other candidates a run for their money. ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection. there. i said it.

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welcome back to the program. european central bank president mario draghi is concerned that a strong euro, which has gained 8% against the dollar may weaken the fragile eurozone economy is raising the easing to the currency's appeal. what will draghi do next? find out what our analysts are saying at cnbc.com. especially after today went after that strong zew data, we're seeing the euro firm again. >> yeah. and they've managed to deal with the consequences of fourth quarter gdp. they've parked that issue. growth, of course, is very much the subject of the italian elections. the prime candidates involved. sylvia berlusconi has released his five-point tax plan in a last-minute attempt to lure voters. but it helps emphasize the difference between the new and

the old guard of italian politics. julia is in milan as we count down to these elections. jules, what is in their five-point tax plan? >> well, you know, i've picked out a couple of the points that i think are pretty interesting. tax authorities should acknowledge good faith from taxpayers. and the fiscal rules here should be respected without fear. now, sounds like a tax amnesty to me and that's something that he's already promised if he win tess election. it's unfortunate timing given that a lot of the civics out there think that the reason why he's got back involved with politics is to sort out his legal issues rather than worry about the future of this country. but it is important for us to compare the old guard with the new movement that we've seen going on. you might be able to hear the crashing and banging going on behind me. what we're seeing if you look to my right, these are the

standards being produced for the rally this evening of beppe grillo's party. he will be speaking later on and i'm going to be interviewing him later and talking about his policies. this is a guy that has effectively ruled himself out. he says no leader of his party can have a criminal conviction, which he does. and he says he's not going to form any alliances with any of the other party. although he's looking to be garnering around 20% of the public vote here, he's not going to form any part of the next coalition government. this is what he said in the past holds true. he is, though, going to be very influential in the next parliament. beppe grillo has been doing these events up and down the country.i think what we see tonight is going to be interruptal in gauging how the support happened over the last week. for now, guys, back to you. >> all right. thanks for that, julia. and we apologize for the sirens.

not that we're responsible for the sirens. anyway, if they interrupted your understanding of that. >> coming up on sunday, probably the main thing people are talking about here in europe. if you're just joining us on the program, these are your headlines. germany's zew index jumped above forecasts sending the euro higher. >> and another merger could be in the works as office max and office depot reportedly high a tie-up. now the rich, famous, the beautiful, they've all descended in london for fashion week. so far, one of the most critically acclaimed shows come from christopher bailey at burberry. he took the 158-year-old brand in you a whole new direction using rubber, leather and metal

to create, in his words, subversive and kinky. we started off by asking about demand for the brand around the globe. >> we just reported in january that the agency was almost almost 60%. >> emerging markets sell up double digits and euro and the u.s. about mid single digits. >> we've seen this shift in china where they're trying to de-emphasize conspicuous consumption. how does that change your market and how does that change england? >> it doesn't have a huge impact. we say right now that 70% of our business is done to a luxury travel consumer. right now, it's chinese new year all over the world. it's not just that this is in china, it's the business ad consumer buying all over the world. london, paris, milan, etcetera. the ads are one thing. they did a number of things last year that impacted gifting,

etcetera. i did tell the team, foef on what we can control. >> when we talk about asia, is southeast asia next? >> yes. southeast asia is absolutely terrific. everyone knows the numbers in vietnam and the population density. it is the asian region and some put in there, some don't. but it is -- yeah, we will be talking about it for years to come. >> and what about here in britain? we keep seeing these headlines. retail numbers are falling. is the business here still growing? >> you know, we're a little bit sheltered from what you read locally, because 70% of our business is done through luxury customers. london represents about 40% of our total european business. and we did report in january that it was still strong. >> and what about the prospect for reshoring british production? as the cost had fallen, has it become cheaper, easier?

are there other reasons for the supply chain, where you would want to bring production back home? >> you know, it's a really great question. we've been focused on manufacturing what we can here for the last six, seven years. we've got two big facilities in the north of england that we've been investing in. we've doubled our workforce over that period of time. all of the heritage rain wear that you see is in stores. the heritage fabric is all woven here in fwlnd, it's manufactured here. it's been a key part of our strategy as we've transformed the company. >> beautiful show. angela aarons there from burberry. coming up, will the u.s. housing numbers improve the sector? >> we'll preview the reports when we come back. to grow, we have to boost our social media visibility.

more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex.

the cochairs of president obama's commission were set to offer up a cost cutting plan today. it would rewrite the tax code and involve deep spending cuts. their new plan would cut the u.s. budget deficit by over $ l $2.4 trillion. it would identify 600 million in plans. the final 1.2 trillion would come from lower caps on discretionary spending. >> and herbalafe saga has a new twist. dan lobe has part of his long position in the company. he reportedly started selling a few weeks ago. he continues to trade herbalife.

bill ackman has been fighting publicly with carl ikahn. shares responded today in frankfurt trade by adding 2.4%. meanwhile, japanese sales regulators say a second lithium ion battery in the 787 dreamliner showed signs of swelling. two of the eight cells in the second battery showed bumps. and it's investigating further to determine whether this is regulatory or not. and just this morning, bp says it will defend itself vigorously in court next week against claims from the u.s. government for signs related to the deepwater horizon oil spill. the company has described them as excessive and not based on reality. it says that it was always open

to settlement unreasonable terms. it believed it was not negligent in the gulf oil spill. about 800,000 barrels of oil captured in the gulf well should not be subject to the fine. bp shares, last we checked, ross -- i'm not even sure if they were trading this morning. so, anyway, 20%. that's what it says the size of the spill is overstated by. >> as far as european markets are concerned, roughly near the best levels of the day. nearly 11% higher for the cac 40. danone certainly helped with that, up 4% after better than expected numbers. >> the s&p 500, yes, is trying to continue its whipping streak. today, futures are generally pointed higher after being

closed for presidents' day. taking a look at what's 09 agenda today, the national association of home builders puts out results at 10:00 a.m. eastern. we'll get numbers today from marriott, herb ba life, medtronnic, express scripts and sealed air, the makers of bubble wrap. home builders have been on quite a run. is it time for profit taking? >> i think that's exactly right. margins going back to peak levels in many cases. housing still is getting better. prices are firming up. i just think it's going to be tough to achieve the price on the stocks right now. >> in today's sentiment survey, it started to jump from those low single digit levels signal ago rebound.

but it's gotten pretty high. how much further progress are we going to need to see on the indicator front? >> remember, it is a diffusion index. it's still below 50 for the most part. so it's not like the index is telling you things are good. it's telling you things are okay. i think we still have a while to go in terms of sentiment to run. what i'll tell you is the stock res baking much more significant growth in the broader markets. so, look, i think things are certainly getting better. there's no doubt the housing market is firmly getting better. the rebound is in place. things are getting better in housing and it's supply issue in the market right now. there's not a lot of inventory on the ground and there's still more room for sentiment to run. there's a lot baked in the stocks right now. >> let's talk about some of these names. how can you play now the home building sector given what you've just said? >> yeah. would have been telling investors that if you want to be long housing right now, you want to go to the hotter names because the riding tide will lift all boats.

there's a lot baked into those that are on the sidelines, as well. >> a lot of the strength we've seen in the new build is coming from multi-family where single building sales are still lacking. >> i think there will be a lot of growth in rental. i think the biggest concern on the robust housing rebound now is coming from mortgage constraints. underwriting is becoming more normalized. i think there is going to be a lot of demand in the multi-family unit for rentals especially as household continues to accelerate. i think that's an area to focus on. i think there will be rental price going forward. i think there is quite a bit of demand for rentals. >> what sort of price growth are we going to have in the future compared to what we've seen? >> in terms of new homes, i can tell you, if you're thinking about new home market and price appreciation, i think there's the potential we could get a lot of price right now. you think about affordability.

we have great affordability, very, very low fixed rate mortgage right now. and you have a lot of purchasing power. you have to put only 3.5% down on a home. there's a lot of purchasing power for the average buyer. i think you could have significant home price appreciation. it could be more significant than that. >> david goldberg from ubs. are you going to buy, ross, into the u.s. market? >> yeah. why not. why not. >> it's like a 06% discount. >> we're going to buy into the u.s. mblth with "squawk box" coming up in just a few moments. from kelly and i, we hope you have a profitable day.